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tv   Government Access Programming  SFGTV  March 13, 2019 10:00pm-11:01pm PDT

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item 10? seeing none, public comment is closed. colleagues any questions or comments? i do have a question. mr. sheehan, have you begun to expend these funds? >> we have not. >> chair fewer: i believe this is retroactive? >> that's correct. the late approval from abag is the running for the retroactivity. abag approve the funds for our government always at the end of the year. we run into this issue. >> chair fewer: thank you very much. seeing no questions or comments. let's move this with a positive recommendation to the board. you can take that without objection. thank you very much. madam clerk please call item 11.
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[agenda item read] >> chair fewer: thank you very much. i see that we have a representative from the sheriff's department here. however, i have been alerted that there is a fiscal impact on this item. with dot no have a b.l.a. report. i like to continue this item until the meeting next week so we can have fiscal impact from our budget analyst. >> we have no objection. >> chair fewer: any members of the public like to comment on item 11. public comment is now closed.
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we'll save our discussion for next week. i'll make a motion to continue this item until budget and finance committee of next week. without objection. madam clerk. please call item 12 and 13 together. [agenda item read]
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>> chair fewer: thank you very much i believe we have sarah emerald from mohcd to report on this. >> before you today are two resolutions requesting permission to enter purchase and sale agreement with two potential landowners. for background the hope s.f. project site received entitlements in march 2017 to revitalize the sunnyvale housing. this will incorporate new public housing replacement units and market rate units on site as well as new public utilities and retail space and another 30,000 square feet of public open space. this map represents the current right-of-way which is boarded to
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the east. the request today is for the purchase of 244 square foot parcels in the current culdesac of sun rise way. the current homeowner shown here has lot 6 and 23 has agreed purchase of the city small shaded pa parcels that flank the culdesac. the acquisition of these parcels will allow the developer to realize new grid with the existing sun rise way parcel. we'll be dedicated back to the city through additional legislation. this alignment will allow for the first infrastructure phase to start for sunnydale hope s.f. the first on site vertical housing development can commence
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which include 167 units of affordable housing with minimum of eight units on it. with that we are here to answer any questions you may have about the project. >> chair fewer: i see there's no b.l.a. report. is there any members of the public that like to comment on items 12 or 13? seeing none, public comment is closed. this is a small property purchase to round out our project hope s.f. colleagues any comments or questions? seeing none. this moves with a positive recommendation. we can take that without objection. are there any items before us today? >> there are no other items. >> chair fewer: thank you. the meeting is now adjourned.
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[meeting adjourned]
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>> providing excellent customer service to each other so that we can succeed together. because we're a small division out here, and we're separated from the rest of the p.u.c., a lot of people wear a lot of different hats. everyone is really adept not just at their own job assigned to them, but really understanding how their job relates to the other functions, and then, how they can work together with other functions in the organization to solve those problems and meet our core mission. >> we procure, track, and store materials and supplies for the project here. our real goal is to provide the best materials, services and supplies to the 250 people that work here at hetch hetchy, and turn, that supports everyone here in the city. i have a very small, but very efficient and effective team.
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we really focus hard on doing things right, and then focus on doing the right thing, that benefits everyone. >> the accounting team has several different functions. what happens is because we're so remote out here, we have small groups of people that have to do what the equivalent are of many people in the city. out here, our accounting team handles everything. they love it, they know it inside out, they cherish it, they do their best to make the system work at its most efficient. they work for ways to improve it all the time, and that's really an amazing thing. this is really unique because it's everybody across the board. they're invested it, and they do their best for it. >> they're a pretty dynamic team, actually. the warehouse team guys, and the gals over in accounting work very well together. i'm typically in engineering, so i don't work with them all day on an every day basis.
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so when i do, they've included me in their team and treated me as part of the family. it's pretty amazing. >> this team really understanding the mission of the organization and our responsibilities to deliver water and power, and the team also understands that in order to do that, we have a commitment to each other, so we're all committed to the success of the organization, and that means providing excellent customer service to each other so that we can succeed . >> my name is dave, and i play defense. >> my name is mustafa, and i am a midfielder, but right now, i
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am trying to play as a goalkeeper, because they need a goalkeeper. >> soccer u.s.a. is a nonprofessional organization. we use sports, soccer in particular to engage communities that can benefit from quality programs in order to lift people up, helping to regain a sense of control in one's life. >> the san francisco recreation and park department and street soccer u.s.a. have been partners now for nearly a decade. street soccer shares our mission in using sport as a vehicle for youth development and for reaching people of all ages. rec and park has a team. >> i'm been playing soccer all my life. soccer is my life. >> i played in the streets when i was a kid. and i loved soccer back home. i joined street soccer here.
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it was the best club to join. it helps me out. >> the tenderloin soccer club started in the summer of 2016. we put one of our mini soccer pitches in one of our facilities there. the kids who kpriez the club team came out to utilize that space, and it was beautiful because they used it as an opportunity to express themselves in a place where they were free to do so, and it was a safe space, in a neighborhood that really isn't the most hospitalable to youth -- hospitable to youth playing in the streets. >> one day, i saw the coach and my friends because they went there to join the team before me. so i went up to the coach and asked, and they said oh, i've got a soccer team, and i joined, and they said yeah, it
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was he for everybody, and i joined, and it was the best experience ever. >> a lot of our programs, the kids are in the process of achieving citizenship. it's a pretty lengthy process. >> here, i am the only one with my dad. we were in the housing program, and we are trying to find housing. my sister, she's in my country, so i realize that i have a lot of opportunities here for getting good education to help her, you know? yeah. that's the -- one of the most important things that challenge me. >> my dad was over here, making some money because there was not a lot of jobs back home. i came here, finish elementary in san francisco. after that, i used to go back
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to my country, go to yemen, my country, and then back here. last time i went back was a couple years ago. >> i came here six months, i know nobody. now i have the team has a family, the coaches. amazing. >> i'm hoping for lifelong friendships, and i'm super inspired by what they've been able to achieve and want to continue to grow alongside them. >> i love my family, i love my team. they're just like a family. it's really nice. >> street soccer just received a five year grant from the department of children, youth and family, and this is an important inreflection point for street soccer u.s.a. because their work in our most important communities is now known beyond just san francisco recreation and park department, and together, we're going to continue to work with our city's most vulnerable kids and teach them to love the
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beautiful game. >> i want to tell everybody back home, i hope you all make it over here and join teams like this like street soccer u.s.a., and live your life. get a better life. >> right away, just be patient, and then, everything will be
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[gavel] >> okay. meting will -- meeting will come to order. i'm sandra lee fewer chair of the budget and finance committee
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our clerk is ms. linda wong. do you have any announcements? >> please silence all cell phones and electronic devices. thank you. >> chair fewer: thank you very much. please call item number three. [agenda item read] >> chair fewer: thank you. colleagues welcome to the first meeting of the expanding budget and finance committee. it is truly an honor to serve as the chair of the budget and finance committee alongside all of you. thank you again to president yee for entrusting me in this role. the city budget the most important piece of legislation that the board of supervisors
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passes every year and it is an opportunity for the city and county to invest financial resources in the programs and services that are priorities of the san francisco residents. san francisco's budget now totalings more than $11 billion nearing doubling in size in the last decade. with that increase have come expanded increased services and programs for city resident, small businesses and community organizations. at the same time, our city budget is increasing, so is our population and needs to the city continues to grow. city hall legislative branch, it is the board of supervisors's responsibility to work the mayor to balance the budget while responding to those shifting needs. as a chair of the board budget and finance committee, it is my responsibility to lead a work work on budget with great care and precision while being inclusive of not only each of my colleague on this committee and the full board you a also inclusive of the public. the dollars spent as part of the
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city budget are taxpayers dollars, generated on the backs of hard working san franciscans. i do not take this responsibility lightly decision we make about how we prioritize the funds. i want to share how the budget process work for new committee memberships. this is a process that chair cohen in place with tweaks and modifications. the expanded five-member budget finance committee is going it meet to prepare for the budget planning physical fiscal year 2019 and 2020 and 2020 and 2021. we are hear from the b.l.a.
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shortly. in may the committee had opportunity to hold additional hearing to hear discussion about the key aspects of the budget. all of these hearings will include public comment. once the mayor proposed budget is released, the budget and finance will have the opportunity to wit review, ideny cost saving and reprioritize those funds. any funds that this committee cuts from the mayor's proposed budget accumulate into a pot of funds then available for the board to add back to the budget for priorities that they've identified. the add-back process for the budget and finance committee when conclude june 26, 2019 and committee will vote to forward to the full board of supervisors who are vote on the budget in july. i wanted to introduce some key principles to guide our budget
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process. one, transparency. i'm committed to publicly releasing budgets documents regularly updating the budget caliber and making the budget process as accessible as possible to the public. two, public unput, members of the public will have the opportunity to comment during each day of committee hearings as well as traditional public comment day that takes place in june. public comment will include two minutes per speaker and accommodations we made for senior and people with disabilities and parents. additionally my office will be meeting with stakeholders who reach out with the budget request and accepting submissions regarding budget request as well as suggestions for departmental cost savings on the budget web page. three, equity. it is critical that as a city we aim to create opportunities for those who have hickl hickly -- historically denied opportunit
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opportunities thrive. four, geographic balance, we must consider a balance both between citywide budget and policy priorities as well as district priorities. we should have a balance between neighborhoods to take into consideration community need as well as access to services and programs. five, accountability. finally it is a responsibility of the budget and finance committee to ensure accountability for the budget as well. so that funds set aside for a particular purpose are used for that purpose. a caliber der reason made public this week on the board website under budget information. i want to thank you all and now introduce dan guncher from the
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budget and legislative analyst office who will present on the priority process. >> good afternoon chair fewer and members was committee. i'm here to provide a brief overview of the budget process for 2019. as you may recall in the spring of 2017, chair cohen requested that the budget and legislative analyst office review the budget process and identify recommendations for improvement. our report was released in november of 2017, provided three recommendations for improvement. the first was for the board to produce a list of annual policy priorities to submit to the mayor for incorporation into the proposed budget. we also recommended that the budget and legislative also provide additional analysis to the board during the budget process in the form of citywide overview report. which our office initiated last
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year in june. finally we recommended that the board revised the admin code to lengthen the amount of time for legislative review. last year, through an informal survey, supervisors we identified four broad policy priorities that held the most consensus. the committee held hearings on each of these areas including on clean streets, homelessness and affordable housing which were discussed in single hearing and public safety. the committee also held separate hearing for prioritie prioritied less consensus. last year's budget priorities process culminated in the passage of three resolutions urging the mayor to fund priorities in the proposed budget. he included resolution 12518 which urge street cleaning priorities, resolution 13418, which urge specific citywide homelessness priorities and
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resolution 150-18 which urge specific across departmentable priorities. over the past few weeks we so solicited the top three priorities including homelessness andousing, public safety and mental health and substance abuse. we're still at an early stage in this process and we've begun reviewing and analyzing these priorities. we will be in touch with board alwayses over the next few weeks to follow up and further refine these priority areas as necessary. as we move forward, our office will conduct in-depth research on each priority including on the status of established programs, on historical spending, performance measures and other quantitative measures of progress as well as identification of funding impact opportunities. in april we'll provide an
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in-depth written report to the board on each of these priority areas on april 10th, i believe will be presenting on public safety. april 17th on homelessness and housing and april 24th on mental health and substance abuse services. the goals of this process is to synthesize budget priorities to guide in the preparation of the proposed two-year budget. to enable the budget and legislative analyst to provide more analysis to the board to assist unctionin -- understandig the city performance. this is the second year that the board utilizing a budget priority process and we do encourage feedback in order to make improvements for the current and future budget cycles. that concludes my presentation. thank you and we're available to answer any questions you might have. >> chair fewer: colleagues any
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questions or comments? >> president yee: in regards to the three categories, one is going health also? again, i'm looking at mental health and physical health as the category. there are different things. seems like there's some connection also to that. when it comes to certain categories of classes of ages, we have to pay more attention to some of the health issues, physical health issues that we
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have in the past. i'm just throwing out threat -- i don't know if my colleagues agree. >> chair fewer: thank you. president yee is this something that you would like to formally add on to the priorities of item number 3 i believe? >> president yee: yes. >> sorry to interrupt, there were a number of other issues that were mentioned that -- some were closely related to these issues that had had the most consensus. others were little bit farther off. i believe that the committee is going hold fourth hearing to discuss those issues. i don't know if the question whether he'll be able to include
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that in the report. >> chair fewer: thank you. i think we can include this topic under our other issues and other categories. would that suffice? we can have a discussion. >> president yee: okay. >> chair fewer: thank you president yee. >> supervisor stefani: on moving forward slide where it says you'll conduct research on each priority. i'm wondering -- i really like that. will you prepare a report on all of this in it? >> yes. >> supervisor stefani: on performance measures what specific performance measures will you be looking at? >> there are official performance measures that's recorded by the city services auditors. there are those that are included in the mayor's proposed
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budget in the mayor's budget book. that will be our first go to and then if there are other measures that the departments might have that are not necessarily put into an official document by the comptroller office, we will try to include those. >> supervisor stefani: what about funding impact opportunities? >> funding impact opportunities we'll be discussing those with the departments. we'll be looking for practical opportunities that could be accomplished within the second year of the two-year budget. we're looking at just some practical changes there. >> supervisor stefani: okay. with historical spending, i envision, pass audits on each
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subject to be included in the report or at least mentioned. i'm thinking about these three issues, homelessness, housing, public safety, mental health and substance abuse. i know there's been pass audits and b.l.a. reports that you've done. to have a thorough understanding to include as much information as possible. especially prior audits or any other reports that you've done that may impact. >> absolutely. last year we just finished audit mental health services and we also did finish an audit on homelessness couple of years ago. we definitely will include the findings as much as they are relevant. >> supervisor stefani: also one public safety one that we're all talking about? >> yes. , thank you.
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>> supervisor stefani: thank you. >> supervisor ronen: just following up on supervisor s's question. you'll be providing input for additional alternative performance measures? >> i think that would be healthy discussion at the hearing. >> supervisor ronen: okay. for me it would be helpful to review them before you actually prepare the report because for example, in the recent homelessness hearing that supervisor mandelman held, the performance measures that the office of homelessness and supportive housing used to decide whether or not they were succeeding in their job, they were not the performance measures that some of us on the board of supervisors would use to evaluate. that can be very subjective and the chance to be able to weigh in on what performance measures
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we love to understand it and get you to review it. it would be great if we had an opportunity. >> i believe we'll be checking in with the committee over the next few weeks and that is something that we can bring forward as part of the update about what we're proposing to include in the report for feedback. >> chair fewer: i wanted to also chime in, i was going to request recommended audits that the committee should read in preparation before the department presentations. if you can recommend some of the audits that we should be reading so we can refer to them in the findings while we're actually questioning the departments on their budgets. that would be great. >> i will follow up on that.
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>> supervisor ronen: i will make one more comment through the chair supervisor yee for me, it would be important to separate mental health and substance abuse from physical health. while they should require equal attention and physical health gets more attention than mental health and brain diseases and substance abuse, the way city deals with them is very separately. i have a lot of questions about how the city is dealing with mental health and substance abuse issues and for me it would be really helpful to have one hearing focused on that issue. i wanted to mention that. >> chair fewer: supervisor mandelman. >> supervisor mandelman: thank you. i want to figure out what the consensus interest of the
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members of the board are. president yee, i'm concerned that -- this maybe something we can solve through the fourth hearing. sort of -- we do have -- report came out this year from the long-term about our tsunami problems. that does require some digestion and thought by this committee and focus on that problem which includes physical health and actually there's weird overlap between that and then sort of homelessness mental health issues. i tend to agree with supervisor ronen those are best handled in separate hearings. what i'm saying is, i do think the given the intensity and interest around mental health in
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the city, the opportunities around pushing for treatment on demand, the desperate need for additional resources and for additional slots for folks coming out of treatment, it's very useful and important to have a separate mental health and substance abuse conversation. there needs to be a conversation about what we're going to do with all these seniors will need homes or need to stay in their homes and need services and help to stay there. i'm hoping that we can figure out a way to deal with both of those. >> chair fewer: president yee. >> president yee: it's my way to figure out the discussion. i totally agree with the issue of seniors. i'm seeing seniors probably be part of each one of these
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discussions. you look at that article that was in the sunday paper about homeless. this is probably question to the chair. there should be two reports that's coming up from police. one of them was introduced last year in terms of trying to figure out the civilianization, the staffing. that one has not been completed. it was supposed to be completed in november. it's taking little bit more time than what the comptroller thought. i'm pretty sure the timing will be perfect to probably have it there so we didn't have to have
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a separate hearing. the other piece, some of you know, i asked for a task force almost two years ago. it finally got up and running in terms of the police department and the commission. according t to the staff, they'e saying that the process will take probably run into the summer. most of the bulk of the work would have been done. there's a good break around april where if you -- i ask them to bring it back to the board at that point. they would have enough information. instead of having a separate hearing, i'm thinking maybe it could be part of the discussion
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here. >> chair fewer: okay. noted. >> president yee: other thing would be, i'm curious when we talk about public safety, we also talking about safety measures? >> chair fewer: i agree. okay. that's great. i think these categories are fairly broad and within these categories, actually i think there's much more detail. when we want drill down about seniors and housing su -- noted. i have my legislative aid here and she is taking notes on this. any more comments or questions?
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>> supervisor mandelman mentioned senior housing. we did hear through informal survey about specialized housing. for seniors, veterans, workforce, we will definitely be addressing that in the affordable housing report. >> chair fewer: that's great. thank you very much. seeing no more comment. this is a great first discussion. do i file this discussion? >> clerk: would you like to have public comment? >> chair fewer: let's open it up for public comment. anyone like to comment on item 3. seeing none, public comment is now closed. madam would i continue this? i would continue this. i make a motion to continue this. can i have a second please? supervisor mandelman. completes out objection. thank you very much. please call items 1, 2 and 4
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together. [agenda item read] >> chair fewer: thank you very much. we have the budget director someone from the comptroller's office. thank you. >> thank you chair fewer and members of the committee. i'm the mayor budget director. we will alternate between the presentation on various elements of the five-year financial plan that was issued in january. i will note that the three
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offices that jointly published that financial report will be publishing an update to it within the next week. we have time in your april schedule to bring a presentation. i wanted to orient everyone to the january document and the projections within that. i'll also speak to the budget introductioinstructions that the to the department. i will do high-level overhave you just of the time line of the state and federal budget and how they journally interact. then the comptroller office will speak to their six-month report. i'll move to slide 3. the five-year financial plan, mayor's budget instructions in
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summary demonstrated that in terms of our projected deficits in the short-term, we're in a similar place to where we were last year with the deficit. i'll walk you through that short. the cost pressure within the near term and causes for future uncertainty that are our radar including growing cost of employees particularly the pension and healthcare costs that are included in our financial projections. the cost shift of the home support program from the state has added significant cost to the city in the last two years. additionally, the large number of baseline set aside about third of the general fund is spoken for due to voter mandated baselines. what i mean by that, it prescribes how they are located to various departments and uses. they do limit flexibility for decision makers.
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we also see not necessarily included within the deficit projections themselves but some uncertainty related to labor negotiations where negotiating over tweet m.o.u.s this spring. the housing authority, financial obligation, those are not included in the deficit as details of those come to light and become clearer. they will have to factor into the balancing of the budget. additionally the five-year financial plan does not assume a recession. should recession occur, i think it is very likely to occur in the next five years, that would exeexacerbate and make the defit higher . there's potential legislative risk from the state
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and federal government. eraf windfall fund which supplemental was just passed by the board. future eraf ri revenues are not included in the deficit given the uncertainty of actions around the state budget process. the state budget process does not come into clear picture until the middle of may. if any changes to educational funding that may impact eraf, if those were to come to pass, we wouldn't know potentially until may or june. we have not included those in the projections. some of the guiding principles that the mayor -- >> supervisor ronen: i have a question about that. >> chair fewer: supervisor ronen.
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>> supervisor ronen: does that mean that the mayor won't be programming eraf as soon as we get the eraf funds for 19-20 in the budget that we receive in june? >> we're still working through the mayor's budget. i think we'll have a better sense in may as to what state action or may not occur. hopefully by june 1st when we'll have a better clarity. >> supervisor ronen: what level of clarity are you looking for? my understanding of risk around eraf and the likelihood that we will be receiving an additional to the tune of $180 million, is that likelihood it's pretty high? i'm curious from your perspective what is the certainty you're looking for?
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>> for the may revised budget to come out and let it's know if there's legislation that contains the specific provisions that will alter our unking of understanding of the eraf. >> supervisor ronen: do you know the date of the may -- >> it's may 15th. which is also the date that labor agreements must be presented to the board of supervisors. may 15th is a big day. >> chair fewer: supervisor mandelman. >> supervisor mandelman: on the -- the amount that we would possibly anticipate if state does not do something, would be roughly half what the first eraf windfall was? or is it the same? >> i don't believe it's that simple. the comptroller's office is
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working on projections. we'll include some more concrete numbers the five-year financial plan which we'll put out next week. i don't know if michelle wants to say anything to that now. we'll have those numbers for the next week. >> supervisor mandelman: my sense it will be less than what we had. maybe i'm wrong. >> sorry. excess eraf windfall that you had supplemental for was about $415 million which was two years worth of assess eraf. presumably one year would be somewhere within that range of half of that. exact numbers we'll determine. it's noit going to be $415 million. that was two years worth of eraf. >> supervisor ronen: that was not what i was told from the comptroller. please weigh in here. >> we are looking at what we think excess eraf will be worth in the budget year.
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it depends on what our local projections and growth are as well as what the state funding formulas for schools will be. we can take -- we can draw. we're going to along the lines what kelly was saying in the update to the five-year plan next week, we're going to be report something close to about $140 million after baseline. >> supervisor ronen: that's just for one year. it's not half of the program amount. that's because we're not required to make the rainy day deposit because the budget hadn't grown by 5%. that is pretty different what i initially expected. that's good news. >> chair fewer: that it is the concern of the committee that the additional eraf money that come in wouldn't be part of the mayor's proposed budget.
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that would be dealt with separately. i think this is just what i'm gathering is this is why we're having this discussion. this is brought up today. >> that will be to be determined. >> chair fewer: i think that we can state as a committee that is a concern. we would like it to be separate than mayor's proposed budget through a separate deliberation process. please continue. >> some of the guiding principles for the mayor's budget and instruction to the departments was also focusing on physically responsible policies regarding building our reserves, both having an eye to limiting ongoing cost, giving the structural devastat deficits.
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mayor feels strongly that we need to make sure every dollar we spend counts. that will be reflected in the budget. the five-year financial plan, some assumptions, we considered it to be a base-case projections. we take services and staffing levels as they currently exist and project out cost pressures and cost growth from there. we don't assume large policy shifts unless otherwise noted in the report. revenue, the comptroller office is projecting strong revenue growth however tapering growth in the outer years due to constraints to growth. the report assumes -- michelle can answer questions about revenue specifically -- salary and benefits assumed in the report, benefit cost increases related to pension and
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healthcare. the report assumes healthcare costs are growing at a rate of 6% each year over the horizon. which is twice the rate of inflation. we'll demonstrate the significant pension growth due to multitude of factors. we also assume inflationary increases on personnel costs on wages. the c.p.i. number that we utilize is a number calculated by the comptroller utilizing combination of moody's and the california department of finance over the horizon of the report, it hovers around 3%. for citywide costs we consume the cost of the ihss cost shift from the state back in 2016 under governor brown. this state decided to change the cost sharing model for ihss and last year's budget alone fiscal year 18-19 and 19-20 that cost shift added $100 million of
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additional cost to the city by the fifth year of this report under the m.o.e., that's the memorandum shared kind of agreement. that cost shift will will cost us $100 million door than we anticipated. i will speak to the state budget and changes to that and later in the presentation. then inflation on nonpersonnel. we assume for nonpersonnel costs contracts and c.b.o. contract costs. it is cp.i. >> chair fewer: i wanted to mention, i think our shortfall isn't bad for 19-20 and 20-21. i'm pleasantly surprised. thanks. >> shortfall is the two-year shortfall for fiscal year 19-20
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and 20-21. it's $270 million. as of the general projection that will change when you put out the march update in a week taking into account the six-month report and other revenue changes that are cost changes we had since january. this is 3rd period to the january time last year, we were about $260 million when we put out the five-year financial plan last year. i will note that it is a five-year horizon and that we do have a persistent and growing deficit meaning the costs are growing at a rate that is far eclipsing that of revenue. expenditures, this group of four kind of high-level category that we have under uses. those growing at 25% over the five-year horizon. all revenues are projected to grow at 14% over the same time horizon resulting in fifth year
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deficit $44 million. we do want to note that underlying revenues in the budget have included significantly higher levels of fund balance that is prior year either revenue better than budgeted or unspent funding and left over at the end of the year. we applied that to the next year's budget to help balance it. we have a significantly growing balance of pink line and that is revenues largely coming in higher than budgeted. also, transfer tax, which is one of the volatile property tax sources has helped support the growing expenditures in revenue helping the budget. i wanted to note some trends
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within the projected expenditure growth that i noted for you earlier. of that $1.4 billion of expenditure growth expected over the five-year horizon, salary and benefits make up about 43% of that including pensions and health. >> supervisor safai: i think s.f. gov tv need to load the slides. >> salary and benefit growth makes up about 43% of the expenditure growth and that made primarily of wages, pension and healthcare costs for citywide operating cost which make up about 29% of that expenditure growth, 40% of that is driven by inflation and nonpersonnel
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expenditures and grants to nonprofits. other citywide operating costs include the minimum wage, minimum compensation growth, our citywide capital equipment and technology budget as well as various other debt services in real estate needs. the inflationary costs are nonpersonnel grant make up the biggest percentage change. for the baselines that make up 17% of the expenditure growth, 66% of that alone is made of the m.t.a. and baseline for peace. 12% of the pie almost 60% of that is related to that ihss cost shift. i will hand it over to michelle to walk you through the fiscal outlook. >> as you know, we update our
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forecast annually. this chart here is just looking at in past five reports that we published, what is the last year of the difference between revenues and expenditures look like? in the report that we just published, we're saying in fiscal year 24, difference between revenue and expenditures of $600 million. i think the take away from this slide is that this number was getting shorter as we expanded rapidly after the financial crises and revenues were recovered quickly. that trend sort of changed after 2014 when we were seeing our out-year shortfall growing. it's largely because of the underlying cost pressures we've talked about so far. it has come down a little bit in our past two reports given strength of revenue growth. spend little bit of time on employee pension cost growth
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because this is something that affecting all governments frankly in the country. it's not really unique to san francisco. the reasons for the cost growth and the pressure that it's putting on governments. you'll see that if you could read the finally number -- tinyr numbers it's about $50 million in fiscal year to projected 430 in fiscal year 22. if we kind of start at the beginning and we see the rapidly growing costs and the early part of the expansion, some of that growth is really the asset losses experienced by the pension system during the financial crises.
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we get over that hump after about five years and at that point, about four years ago when we were doing this report, we were expecting and projecting pension release. that's what that little red bubble there showing. we wanted to show remind ourselves we had overcome, we reached that peak, and voters approved changes to pension plans including new lower cost tier for new employees that would help make a difference in the pension liability. we were looking forward to little bit of relief. number ever factors, many are not unique. due to some familiar factors, we haven't experienced that relief. we're looking forward to growing rates for a couple of years. it's the main reason for that, some of it's great news that we are living longer and our
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pension actuaries taken that into account. it does increase costs. our pension system assumes 7.5% rate of return which they have recently knocked down to 7.4% rate of return, the pension return system board approved that decline in the discount rate in november. we'll see slight uptick in the rate to pay for that shortly. the return are volatile. in the current year to date, we're about 1.3. we consider that a short fall from our expected 7.5. we'll paying for that as well. just some other more obscu


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